Bringing broadband to 18 million more Americans

FCC chairman Julius Genachowski unveils a plan to bring broadband access to 18 million more Americans, mostly in rural areas. But it involves dismantling and rebuilding a 15-year-old national service fund.

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FCC Chairman Julius Genachowski speaks to reporters at his office in Washington in 2010.

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In 1997, broadband Internet was a luxury that few people needed or could afford. (What would you do with it, anyway? YouTube and Facebook weren’t even around back then!) Today, though, it’s practically a necessity for working from home, sharing information, and collaborating with others. Not having broadband is a pretty big barrier to innovation and economic contribution, right?

That’s the argument that FCC chairman Julius Genachowski used last week in proposing the “Connect America Fund” (CAF), a plan to expand broadband access to 18 million more Americans in rural areas.

The nitty-gritty of the plan hasn’t been made public yet, but here’s what we know. The proposed CAF would have two goals: bringing broadband Internet to under-served areas, and expanding people’s access to mobile broadband (think expansion of 4G networks). If you’re wondering at this point whether that would mean more gold flowing to the coffers of Verizon, AT&T, et. al, think again. Genachowski was quick to point out that funding for the government plan would be directed to areas “without an unsubsidized competitor, and where support is needed to extend or sustain broadband networks” – in other words, remote areas where the telecoms haven’t already installed infrastructure.

Where would the funding for this new plan come from? Well, remember how we mentioned the year 1997 at the beginning of this article? That’s the year the Universal Service Fund (USF), the existing federal framework for making telecom inroads in rural areas, was established. It basically pools charges from consumers’ monthly phone bills – to the tune of about $8 billion a year – and uses them to support phone service to libraries, schools, the poor, and high-cost rural areas. But technology has changed so much since 1997, Genachowski says, that the USF has become “wasteful and inefficient.”

BusinessWeekreports that the new plan would eliminate lots of those hidden subsidies and, over the next several years, shift money away from the USF and toward the Connect America Fund, where it would be used to spur broadband adoption. The FCC would also revamp the fees that consumers pay to rural carriers for connecting phone calls. The FCC’s eventual goal is to increase the proportion of people using high-speed Internet at home from 65 percent, where it stands today, to 90 percent.

Do you live in a remote area? Are your Internet needs woefully under-met? Would the FCC’s proposed plan benefit you? Let us know in the comments.